The doctored photograph of Obama closely resembles the image of the late Heath Ledger, who co-starred in last year's blockbuster 'The Dark Knight'.
It is also an inversion of the now iconic image of Obama's face used in his presidential election campaign.
The uncredited work is dominated by an image of Obama's face. His lips smeared in clumsily-applied red lipstick, his eye sockets kohl-black and his hair dyed green -- an image that almost exactly resembles Ledger's Joker.
Under the image is just one word "socialism".
The term is a massive insult in America, a country infamous for its often paranoic anti-socialist stance.
So far, no group or individual has claimed credit for the posters, which have begun appearing outside of LA in cities including Atlanta.
The stunt has been met with a gleeful response from rightwing commentators in the US. Thomas Lifson wrote on American Thinker website with predictable anti-Obama bile.
He said: "It is starting. Open mockery of Barack Obama, as disillusionment sets in with the man, his policies and the phoney image of a race-healing, brilliant, scholarly, middle-of-the-roader."
From the left side of the political spectrum, Obama's supporters have denounced the poster, saying it is "mean spirited and dangerous", while some have gone as far as describing the image as "racist", because of the white make-up.
The accusations against Obama of socialism come as the president attempts to introduce healthcare reforms -- in the form of a $590bn (£349bn) programme. His attempts to force the reform through Congress have drawn the ire of Republicans and their ilk.